SWOT Analysis of 3M

Introduction 

Swot analysis of 3M. The 3M Company is a conglomerate US multinational company. Hermon W. Cable, John Dwan, William A. McGonagle, Henry S Bryan, and Dr. J. Danley Budd were the founders of 3M, and they laid the foundation of the company on June 13, 1902, under the name of Minnesota Mining and Manufacturing Company. The headquarter of the company is in Maplewood, Minnesota, USA.

3M’s main products and services are optical films, healthcare software, electronic circuits, car-care products, medical products, insulating materials, electronic/electrical connecting, orthodontic products, paint protection films, window films, personal protective equipment, passive fire protection, abrasives laminates, and adhesives.

According to an estimate, the annual revenue of 3M in 2020 was 32.184 billion dollars, and it has increased by 0.15%. Out of which, the net income of the conglomerate company was 5.384 billion dollars, and it has increased by 17.81%. However, the company has employed 94,987 employees to manage its worldwide operations.

3M’s top competitors are Nikon Kohden, Avery Dennison, Johnson Electric, Panasonic, Tyco, Carlisle, Danaher, Corning, Johnson & Johnson, Honeywell International, Pfizer, Emerson Electric, and General Electric.

Today, we’ll discuss the swot analysis of 3M. It’s going to focus on the internal and external factors impacting the world’s leading conglomerate organization. Here’s the swot analysis of 3M as follows;

Strengths of 3M

Corporate Social Responsibility

3M is a socially and environmentally responsible organization. In fact, the company has adopted the pollution prevention project back in 1975 under the name of 3P (Pollution Prevention Pays). However, the brand has decreased its pollution level up to 72% in the early 2000s.

The company won the US Environmental Protection Agency’s Energy Star Award in 2012. It shows the company’s commitment to the society and environment. It’s also a great marketing logo of the company to attract the environmentally-conscious customers market.

Products Reach  

Many retailers and distributors have brought 3M’s products and services to more than 200 countries across the world through their various distribution channels. It shows the global reach of the company’s products.

Better Finances

The pandemic of covid-19 brought a lot of havoc to the business and companies across the world. 3M is one of the few companies that have survived the pandemic, lockdown, and shutdown of businesses. In fact, the company’s net income and annual revenue have increased by 17.81% and 0.15%. It shows the strong financial position of the company to launch various projects.

Brand Recognition

According to an estimate, 3M is operating in business in more than 65 countries worldwide under the same brand. It shows the strong brand name and brand recognition if it’s selling its products in over 65 countries.

Product Portfolio

One of the reasons 3M has maintained its income and profitability is because of its diverse product portfolio. The company’s product portfolio comprises over 55000 products and services. It’s also important to know that the company sells its products under many brand names.

Research & Development

Research and development are one of the reasons 3M has been in the business for more than 115 years. According to an estimate, the research and development budget of the company in 2020 was 1.878 billion dollars. The company has been spending billions of dollars on R&D for the past few decades. It’s because the company knows the significance of innovation and creativity.

Brand Value

According to an estimate by Interbrand, the brand value of 3M in 2020 was 9,409 million dollars, and it has increased by 4%. The company ranked at the 67th position of the Best Global Brand of 2020.

Weaknesses of 3M

Fragile Brand Image

The global brand image seems good, but it comes at a heavy price and responsibility. A small mistake or wrong decision could jeopardize your decades of hard work. The difficult part for 3M is to maintain its position in the international market.

Mast Shortage

It’s no doubt N95 masks of 3M are very effective to avoid the spread of virus. As soon as the doctors and WHO prescribed the N95 masks, their supply became short in the market. The government jumped in and enforced the company to stop importing it to Canada and other countries. The shortage of masks caused a lot of panic among the public.

Litigations

Minnesota State filed a lawsuit against 3M for 5 billion dollars in 2010 claiming that the company released toxic PFCs into the air and water. Even though the company maintained claimed that the chemical posed no threat to humans, but the company agreed to pay 859 million dollars on the settlement in 2018.

Opportunities available to 3M 

Business Diversification

3M should consider expanding and diversifying its business portfolio by adding more businesses since the company has a strong financial position. It would help the company to increase its market, growth, and influence in the global market.

Automotive Industry

As we automobile industry is the world’s highly profitable industry. Its market is recovering from the pandemic and economic recession. However, 3M should enter into the automotive industry.

Acquisitions

3M has bought many brands over the years. Like Meguiar’s, Softmed System, Archon Technologies, Ceradyne, MModal, Scott Safety, Acelity, and many others. They have helped to increase the company’s product portfolio and customer market share. The brand should keep acquiring businesses and companies and growing.

Threats 3M has to face 

Risks outside the US

Globalization has a lot of advantages for multinational companies. But it also comes with a lot of risk factors like trade regulations, taxes, exchange rate, political conflicts, and so on. As 3M is expanding its business globally. The company should be ready to face such challenges.

Competitors

Tyco International, Textron, Johnson & Johnson, Honeywell International, CONMED Corporation, Cardinal Health, Balchem Corporation, and Avery Dennison are some of the top competitors of 3M. Their increasing market share and profit growth present a severe threat to the company.

Regulations

It’s no doubt 3M has taken a lot of CSR initiatives over the years and won many awards. Even then the company has to pay 859 million dollars. It shows the sensitivity and fragility of the environment that has become very important to the public and the governments worldwide.

Conclusion: 3M Swot Analysis 

After a careful study of the swot analysis of 3M, we’ve concluded that 3M is indeed the world’s leading conglomerate company. The competitors, litigation cost, shortage, and regulations are some of the main challenges. 3M should utilize its resources to expand its products business portfolio and keep in mind the regulations while making any decisions.